MANILA (Bloomberg): Thailand’s inflation breached the central bank’s target ceiling for the first time in more than three years as higher oil prices and flood-related food costs intensified price pressures, though officials signaled the price spike may be temporary.
The consumer price index rose 3.9% in October from a year earlier, accelerating from 2.82% in September, Commerce Ministry data showed Friday. The reading was far faster than the 3.33% median estimate in a Bloomberg survey of economists. The Bank of Thailand aims to keep inflation in a 1% to 3% range.
"Inflation is not too high and is still acceptable given that it used to rise to 6% during the Russia-Ukraine war,” Nantapong Chiralerspong, director-general of the Commerce Ministry’s Trade Policy and Strategy Office, said at a briefing in Bangkok. "Over the past two days, we have seen oil prices fall by about 10%, driven by the potential shift in US policy.”
Headline inflation is still forecast to average 1.8% to 2.2% in 2026, he said, though headline inflation may stay elevated for the rest of 2026 because of a low base of comparison last year.
The data come a day after the Philippines, another Southeast Asian country which is heavily dependent on imported energy, reported inflation surged to 7.8%. That underscores the continued damage to energy-importing nations from the US war on Iran, which has disrupted supplies and driven up prices.
The release came before Thai stocks opened. Most Asian markets are trading lower following a rout on Wall Street.
More than half of Thailand’s inflation was the result of high oil prices, Nantapong said. Rising prices of processed food and vegetables were also a factor.
The high reading complicates the outlook for a central bank that has been keeping borrowing costs low to support still-subdued domestic demand. The BOT has signaled it expects an ongoing inflationary surge to be temporary, limiting the case for an immediate rate increase. Governor Vitai Ratanakorn said last week that the current 1% policy rate remains appropriate.
The central bank’s Monetary Policy Committee kept its benchmark rate at 1% last week and raised its economic growth forecasts for the second time this year as the artificial-intelligence boom supports exports and private investment.
"Oil prices in 2027 should remain at a manageable level of around $90 a barrel, although much will depend on the situation in the Middle East,” Nantapong said. "On inflation next year, I want to remain conservative for now and wait to see where oil prices are heading. I don’t want to make an estimate yet.”
--With assistance from Claire Jiao and Cecilia Yap. -- ©2026 Bloomberg L.P.
